Red Marks and Blue Marks: Is Hyper-partisanship Happening for American Businesses?

This article is part of our last Special DealBook Report on the trends that will shape the decades to come. We are in 2041 and Starbu...

This article is part of our last Special DealBook Report on the trends that will shape the decades to come.

We are in 2041 and Starbucks has real competition. Black Rifle Coffee Company, the conservative favorite in Java, has opened thousands of branches across the country.

Starbucks, whose longtime chief executive Howard Schultz pioneered a new wave of liberal corporate activism at the turn of the century, still dominates the coffee scene in college towns and urban centers across the world. ‘Blue state. But Black Rifle Coffee, now publicly traded with a valuation of $ 250 billion, is booming in the country’s suburbs and in large and small towns in the Deep South and West Mountain.

Online, the partisan divide is just as wide. Facebook has essentially become a one-party site, a forum for conservatives – and sometimes conspiracy theorists – to discuss the dangers of immigration and excessive government regulation. Snapchat has become the Liberals’ go-to social network for sharing videos calling for voting reform and higher taxes for social programs.

Even clothing became fully politicized in 2041. As Americans looked for increasingly obvious ways to display their tribal allegiances, two brands that were previously middleman retailers – Levi’s and Wrangler – have become corporate juggernauts. At Democratic rallies across the country, Levi’s red logo is just as ubiquitous as the red Make America Great Again hats were during the 2016 presidential campaign. In Republican strongholds, Wrangler jeans are as common as jeans. Nike shoes.

This imagined future is not as far-fetched as it seems. In recent years, big brands have become increasingly entangled in social and political debates and leaders have become spokespersons for causes on the right and on the left. With little indication that the country will become less polarized in the years to come, it may be inevitable that American businesses, like the electorate itself, will split into red and blue brands.

“It’s always part of the social context of the business,” said Jeffrey Sonnenfeld, a professor at Yale’s School of Management who has helped business leaders formulate their responses to burning issues. “It’s the job of CEOs to bring up the issues and explain why it matters to them. “

Brands have been involved in politics for decades of course. Pepsi and General Motors were among the companies to stop doing business in South Africa during the apartheid era. IBM and Apple were among the first companies to offer benefits to same-sex couples in the 1990s. Yet, for the most part, companies have done their best to avoid culture wars.

The election of Donald J. Trump in 2016 changed everything. Mr. Trump’s positions on issues ranging from immigration to race relations to climate change have forced companies to clarify their positions. Often, under pressure from employees and customers, companies have broken with the president. After Mr. Trump equivocated in his response to an explosion of white nationalist violence in Charlottesville, Virginia, for example, two advisory councils made up of prominent business leaders were dissolved, many of them repudiating the president and his reply.

Over four years of this momentum eventually led many senior Republicans to start pushing back on big business. This year, as businesses rallied against restrictive new voting laws proposed by Republicans across the country, Sen. Mitch McConnell of Kentucky told CEOs to stay in their lane.

“My warning, if you will, to American business is to stay out of politics,” he said. noted in April. “It’s not what you were designed to do. And don’t be intimidated by the left for defending causes that put you right in the middle of America’s biggest political debates. “

Senator Marco Rubio of Florida posted a video in which he called companies denouncing Republican laws “waking up corporate hypocrites.”

And Stephen Miller, adviser to Mr. Trump, said on Twitter that big business “openly attacked sovereign US states and the right of their citizens to hold their own elections,” in what he said. called “A corporate ambush against democracy”.

There are indications that leaders are trying to extricate themselves from politics. When Texas lawmakers passed restrictive abortion law this summer, few businesses spoke on either side of the debate. Google, which three years ago stopped working on a Pentagon contract after an employee uprising, is quietly back in auction for defense work. Developments like this suggest that a hyperpartisan future may not be the inevitable outcome for American businesses.

Yet for every example of a company trying to moderate their affiliation with controversial issues, there is a new example of a CEO sinking deeper into political scuffles.

Last year, Goya Foods became a political lightning rod after its chief executive, Robert Unanue, became a staunch supporter of Mr. Trump. Some Boycotted Latinos the brand, while Republicans rallied around it.

John Schnatter, the founder of Papa John’s International, was ousted from the pizza chain he founded after uttering a racist insult on a corporate conference call. He recently called Upon leaving the company, he began “a crucifixion”, blaming “the progressive left elite” for his downfall.

Kenneth I. Chenault, the former chief executive of American Express and one of the black business leaders who have led companies’ response to a wave of restrictive voting rights laws this year, recently said that he was not moved by appeals to directors general to stay out of politics and he considered it his duty to continue to speak out on issues in which he believed.

“We can have partisan disagreements,” he said. noted. “What we need to align ourselves with as a country are the core values ​​and principles that we will stand up for. “

Figuring out when to speak up and when to remain silent is one of the most difficult calculations for leaders today. Be silent about a given issue, and passionate employees and customers might accuse the company of insensitivity. Engage in a public debate on a partisan topic, and opposing party members may accuse the brand of playing politics.

“How do you determine what is important to your stakeholders? Said Tim Ryan, US chairman of PwC, the accounting and consulting firm. “They are trying to figure this out. What is important to my employees, clients and investors? “

Research shows that the public increasingly expects business leaders to speak out. Edelman, the public relations firm, regularly asks people about the role of business in politics and this year found that 86 percent of people questioned expect business leaders to make a public commitment to major societal issues.

Yet, as brands have discovered too often in recent years, it can lead to boycott calls, deadly social media battles, and distracted work forces.

When Coca-Cola CEO James Quincey launched into the debate over a new election law in Georgia, no one was happy. Democrats who opposed the legislation accused Mr. Quincey of doing too little, too late; Republicans who supported the new law were furious when he said anything.

It was the kind of dead end situation the leaders tried to avoid at all costs, and yet Mr. Quincey had no choice but to engage. Even before he spoke, protesters in Atlanta were calling on the company to get involved and social media was abuzz with questions about what Coca-Cola, one of the city’s largest employers, would do.

And while many business boycotts fail after a few news cycles, consumers are increasingly willing to vote with their money. Almost two-thirds of consumers around the world are willing to support or avoid businesses because of their positions on political or social issues, according to Edelman.

There is always a chance that the political waters will calm down, that the toxic partisanship that is gripping this country will abate, that Americans will find common cause in a new era of bipartisan courtesy. If this unlikely development were to occur, companies might be able to gracefully extricate themselves from the heated debates on the big issues of the day.

More likely is a world where executives and the companies they run are increasingly affiliated with one party or the other. When Mr. Trump ran for office, news sites feverishly followed which leaders supported his campaign and which sided with Joe Biden. In the months following the Jan.6 uprising on the U.S. Capitol, research groups identified companies that donate to Republicans who voted against certification of Electoral College results.

Darren Walker, chief executive of the Ford Foundation and director of several large companies, said the future shape of CEO activism could, in a way, depend on who is in charge two decades from now. . Greater diversity at the highest levels of business, Walker said, would almost certainly lead companies to take more aggressive positions on issues that mattered to members of those communities.

“If in 20 years the Fortune 500 has dozens of people of color and women as CEOs,” he said, “if there are boards and committees that are diverse, I think that’s is a categorical yes that businesses will be more engaged.

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Newsrust - US Top News: Red Marks and Blue Marks: Is Hyper-partisanship Happening for American Businesses?
Red Marks and Blue Marks: Is Hyper-partisanship Happening for American Businesses?
Newsrust - US Top News
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